Sunday, March 9, 2008

Europe has lower corporate tax rates.

(Click to enlarge)

Is it time to get rid of the corporate tax? I was watching Larry Kudlow on his “Kudlow and Co.” show the other day when he mentioned this. After doing some snooping around, I was surprised to discover that more than a handful of nations in the European Union have cut their corporate income tax rates over the last several years or so. I was surprised by this since as Americans we tend to view European governments as being high tax and state-welfare havens. In the last six years, 16 E.U. nations have cut their corporate tax rates. Even France and Sweden have lowered their corporate rates to business friendly levels. The U.S. has kept its rate at roughly 40 percent (Federal and State combined). Now that our country is facing a severe slowdown in the economy, wouldn’t it be prudent to at least lower our corporate tax rate in order to create an incentive for companies to invest in our country? It seems that we may be at a disadvantage when compared to many European nations that have lower rates. We should not discourage job creation and capital investment at such a critical time. For a study on our corporate tax vs. E.U. corporate tax, seeTax Foundation